In a recent development, Punjab National Bank’s (PNB) board has given the green light to a proposal aiming to raise Rs 7,500 crore through a qualified institutional placement (QIP) or follow-on public offering (FPO). The bank’s shares witnessed a 1% gain, reaching Rs 96 per share on December 29 in response to this decision.
Throughout the current year, PNB’s stock has exhibited remarkable performance, surging over 68%, securing its position as the top performer in the Bank Nifty index. On December 28, 2023, the shares marked a 52-week high at Rs 97.
As outlined in the exchange filing, the fundraising initiative is slated to occur in one or more tranches during the upcoming financial year. The filing stated, “The board of directors, during a meeting on December 28, approved the proposal for raising equity capital for an amount aggregating up to Rs 7,500 crore in one or more tranches during 2024-25 through Qualified Institutional Placement (QIP) or Follow-on Public Offering (FPO) or any other permitted mode or a combination.”
Analysts from Sharekhan anticipate that PNB’s robust outlook and swift improvement in asset quality will expedite the normalization of credit costs, enhancing the potential for improved return ratios. Sharekhan has maintained a ‘buy’ recommendation for PNB, setting a target price of Rs 105 per share.
